WASHINGTON - Northrop Grumman Corp. said Wednesday earnings for the third quarter were hurt by higher pension costs, but solid revenue pushed results well past analyst estimates. The maker of military aircraft and defense electronics also lifted its profit outlook for the year.

Northrop now predicts 2009 earnings per share between $5 and $5.15 - surpassing Wall Street's current forecast of $4.85 per share, as measured by a Thomson Reuters analyst survey. Northrop previously projected income of $4.65 to $4.90 per share for the year.

In morning trading, shares of the No. 2 defense contractor by revenue rose $1.31, or 2.6 percent, to $51.10.

Northrop has been repositioning itself in recent years to expand its electronics, information and intelligence businesses to keep in line with the Pentagon's buying strategy.

Under President Barack Obama, the Pentagon has restrained spending, placing more emphasis on weapons needed to fight the insurgencies it faces in Afghanistan. That means less of an appetite for the big weapons used to fight conventional wars, like giant warships, expensive fighter jets and hulking Army vehicles.

In the third quarter, Northrop's income fell about 4 percent to $490 million, or $1.53 per share, from $512 million, or $1.51 per share, in the same period last year. It was well above analysts' average forecast of $1.18 per share. Per-share results improved despite a decline in net income because the company repurchased 4.7 million shares during the quarter, reducing its share count.

Quarterly earnings were reduced by 19 cents per share as a result of pension expense. However, Northrop also recorded a tax break of 23 cents per share.

Revenue grew 4 percent to $8.73 billion, led by the company's shipbuilding unit. Shipbuilding sales rose 14 percent as a result of increased work on several Navy programs including the Virginia-class submarines, an amphibious transport dock ship and a class of destroyers.

Aerospace sales increased 5 percent on higher revenue from unmanned aircraft, like the Global Hawk.

Revenue from Northrop's Electronic Systems and Information Systems units rose 2 percent and 4 percent, respectively.

The Los Angeles-based company contributed $586 million to its pension plan in the third quarter, which it didn't in the same quarter last year.

Northrop said it received a total of $10 billion in new business awards during the July-September period.

Elsewhere in the sector, Northrop rival Lockheed Martin Corp. on Tuesday raised its 2009 profit outlook to reflect a tax benefit, but offered a dim outlook for next year as the Pentagon clamps down on spending and pension costs rise.

Aerospace company Boeing Co. on Wednesday posted a 9 percent gain in its defense business, which makes fighter jets, satellites and security systems.

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